Profits up at IAG but French air traffic control strikes take toll

Profits up at IAG but French air traffic control strikes take toll

International Airlines Group has seen profits for the six months to June 30th increase to €835 million, up 5.7 per cent on the same period last year.

The British Airways owner reiterated its outlook that it expected annual operating profit to be higher this year at current fuel prices and exchange rates.

IAG also owns the Iberia, Vueling, Aer Lingus and Level airlines.

Total revenue at the group was up 3.1 per cent, to €11.2 billion, while basic earnings per share were up more than 140 per cent to €0.68.

Willie Walsh, IAG chief executive, said: “There was a strong performance in both unit revenue and costs.

“At constant currency, our passenger unit revenue increased by 2.3 per cent while non-fuel unit costs went down two per cent.

“Unfortunately, French Air Traffic Control strikes continued to challenge our airlines’ operations causing disruption to our customers.

“Vueling was particularly affected and incurred an additional €20 million of disruption costs in the quarter.

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“These strikes are also having a significant negative impact on the Spanish economy and tourism.”

In June British Airways joined with rival carrier Ryanair to urge the EU to tackle what it views as the growing problem of air traffic control strikes, particularly in France.

At current fuel prices and exchange rates, IAG still expects its operating profit for 2018 to show an increase year-on-year.

“In July, Level started flights from Paris Orly to Montreal and Guadeloupe,” added Walsh.

“We are committed to accelerating Level’s growth and its fleet will increase to a total of seven A330-200 aircraft in Paris and Barcelona next year.

“Also, we launched Level short-haul operations from Vienna where it will have four A321 aircraft that will operate to 14 European destinations.”

However, the future of Level may well be thrown into doubt should IAG complete its proposed takeover of Norwegian.

In April, IAG acquired a 4.6 per cent stake of the struggling low-cost carrier with a view to starting takeover discussions.

Two proposed bids have been rejected, with a third potentially in the offing.